IMF managing director Kristalina Georgieva warned governments face "very tough political choices" as they must rein in spending to combat soaring bond yields pushed to multi-decade highs by higher energy prices from the Iran war. Speaking in Singapore ahead of IMF/World Bank meetings in Bangkok, Georgieva said 10-year borrowing costs for the US, Germany and Japan have reached their highest levels in decades and are "still climbing". Global bond markets have sold off sharply amid a combination of Middle East war, central bank rate hikes and mounting public debt.
With global debt-to-GDP set to exceed 100 per cent, Georgieva identified excessive fiscal deficits and high debt-servicing costs as major factors threatening global economic health, calling for urgent consolidation plans as deficits remain far too large since the pandemic.
Source: Financial Times Markets · Summarized by HeadlinesBriefing